HIV and Insurance: Some Questions and Answers

1. I just found out I am HIV-positive, but I don't have insurance. Can I get insurance now?

If you go to work for an employer with 15 or more employees, Federal law (the Americans with Disabilities Act) gives you the right to the same insurance coverage provided to other employees. HIV cannot be singled out for special treatment. While insurance plans can exclude those with serious illnesses, large group plans rarely do so. If you are part of a small employee group, many states (including New York, New Jersey, California and Florida) now guarantee access to small group coverage regardless of your health, but in many other states, you can be excluded. If you are an individual purchaser, opportunities also vary from state to state. New York guarantees access to comprehensive coverage (beginning January 1, 1996, including prescription drugs and an out-of-network option) through any health maintenance organization ("HMO"). New Jersey offers an option of five standardized plans. Some state Blue Cross plans have open enrollment. In about half the states, there are high-risk pools for uninsurable individuals. But there are still a few states with no options at all. Check with your state insurance department. In all of these circumstances, you may be subject to a waiting period for coverage of your pre-existing conditions.

Life and disability insurance will be much more difficult. In some states, you can purchase small amounts on a "guaranteed issue" basis from special risk brokers. Most people, however, will only be able to get life and disability coverage by going to work full time as part of a large employee group.

2. I do not know if I am HIV-positive, but I have had several sexually-transmitted diseases and I have used drugs. Will this affect my application for insurance?

If you are applying for health insurance in an "open enrollment" environment, you will have the same opportunities as anyone else (see answer to question 1). In states that do not offer that opportunity, or if you are applying for life and disability insurance, a history of sexually transmitted diseases might lead the insurer to decline your application or at least to request a blood test, including an HIV antibody test, and a physician's statement. A history of drug use may cause the insurer to decline your application or to charge you a higher premium. Rules will vary from company to company.

3. If I apply for insurance, may I be required to submit to an HIV test?

Right now, insurers in most states can take blood tests for HIV antibodies if you give written consent after you are given information about the test. However, testing is usually prohibited for individual and small group health insurance when that insurance is required to be sold on an open enrollment basis.

4. Suppose my medical insurer refuses to pay a claim and I think it is wrong?

Request review of the claim denial. In employee group health plans, you must ask your plan administrator claims administrator for a review within 60 days. Your doctor may be able to help you gather the information necessary to have the claim reviewed.

5. My insurance company has been denying my claims for prescription drugs. Can it do this?

If you have prescription drug coverage, you should be reimbursed for any medically necessary drugs, like AZT, which are approved by the Food and Drug Administration for your condition and prescribed by your doctor. If the insurer refuses to cover you because it says the drug is not necessary or proper for your condition, you should ask your doctor to write a letter explaining why the drug was properly prescribed. Some states (Washington and New Jersey, for example) have rules which favor coverage for "off-label" prescriptions of drugs developed for other diseases.

If you do not have prescription drug coverage or if your insurance does not cover all of your drug costs, you may be able to obtain free drug coverage through various state ADAP's (AIDS Drug Assistance Programs). Ask your local AIDS service organization or state health department for information. Eligibility criteria vary widely.

6. If I make claims on my insurance, will my premiums go up?

Your premiums will not increase just because you make claims. The rate of premiums usually depends on the aggregate of all claims submitted to the insurer by people in your company if you work in a large group. Individual or small group insurance may have premiums set by a much larger group: the entire community buying the policy. There are often limits on how quickly premiums can change.

Premiums on life and disability policies are sometimes waived if you become disabled. Read your policy carefully.

7. How do I know what coverage I have?

Read your policies. If you have group coverage through your employer, you should have been given a "summary plan description" which you should review. If the SPD does not answer your questions, you have the right to review the underlying insurance policies and benefit plans of the employer.

8. What is a pre-existing condition?

A pre-existing condition is an illness which caused symptoms or for which you received or should have received medical treatment before your coverage started. (But definitions vary. Read your policy carefully.) Health policies usually limit coverage for pre-existing conditions during the first several months, and sometimes as long as the first year or two of coverage. However, a number of states have enacted "portability" rules in recent years. If you change to a new individual or small group health policy, you may get credit for time spent on previous policies if there was only a short break (not more than 60 days in New York, 90 days in New Jersey and California) between the old policy and the new. That way, you can more easily change jobs without a break in health coverage. Be cautious, however. Portability rules rarely apply if you are entering a self-insured plan.

Disability policies also have pre-existing conditions limitations, and they cause more difficult problems. It is not as easy to change disability policies. If you become disabled during the limitations period as a result of a pre-existing condition you will never receive benefits. If you are thinking of changing jobs, but are at risk of becoming disabled soon, proceed with caution: check your new employer's policy out before you change jobs. Only New York has portability rules for disability coverage.

9. I am presently covered by my employer's group plan. What happens if I lose or change my job?

Under a law called COBRA, employers with 20 or more employees who offer group health coverage must offer 18 months of continued health benefits if you become ineligible for coverage by reason of job loss or reduction of hours. If you lose coverage because of divorce or emancipation from or death of a covered employee, you can get 36 months of continuing coverage. If the Social Security Administration determines that you were disabled when you stopped working and you give your employer prompt notice, you will be entitled to 29 months of continued coverage. If you get on another group plan your COBRA rights will expire, but if the new plan has a pre-existing condition limitation affecting you, you can keep your COBRA coverage even while you have the new plan. COBRA eligibility also terminates when you become eligible for Medicare.

Small group policies issued in New York and California have the same COBRA periods as large groups. Some other states have shorter continuation rights.

10. How does COBRA work and how much does it cost?

Your employer will give you notice of your COBRA rights and you will have to sign up within 60 days. You have to pay all the premiums for the coverage to your employer, including the share your employer used to pay for you, plus a 2% surcharge. You must begin paying within 45 days after you elect. If you get the extra 11 months of COBRA because you were disabled when you stopped working, you will have to pay a 50% surcharge during that period. In New York, however, if your employer had fewer than 50 employees, you will not have to pay this surcharge.

11. What happens when COBRA terminates?

If Social Security considers you to have been totally disabled for 29 months, you will be eligible for Medicare. Medicare has some gaps in coverage, including prescription drug coverage, and you should investigate options available to you at least six months before the end of your COBRA period. If your COBRA period ends before 29 months is up, you may, depending on circumstances, have several other rights, including purchasing an individual "conversion" policy, purchasing Blue Cross, HMO or high-risk pool coverage, and in some cases using a year of extended benefits for your totally disabling conditions. You should do careful planning at this point and consider obtaining professional assistance.

12. What about my life insurance when I stop working?

In most instances, when you stop working you can buy a life insurance policy directly from the insurance company which insured your group. No health questions will be asked. You usually have to apply and pay premiums within 31 days of the end of your eligibility for group insurance.

13. Can I sell my life insurance for cash?

Yes. This is called viatical settlement. But you should not do this until you have carefully explored the implications with a professional. Receiving the settlement may jeopardize your rights to other benefits and may produce adverse tax consequences. There may be better ways to achieve your financial goals, including "accelerated benefits" from the insurers themselves and loans from family, friends or even commercial lenders which are forming to serve the same market as viatical companies. Check with your state insurance department to see if it licenses viatical companies and, if so, whether the company you're dealing with is licensed.

14. I was just diagnosed HIV-positive but I feel pretty good. Can I stop working and receive disability benefits? When am I considered disabled?

Being HIV-positive alone is almost never enough to give you disability benefits. Your disability claim usually depends on your doctor's evaluation of your ability to work. Social Security looks at your specific medical diagnoses to determine if you are capable of doing any substantial gainful work. In some cases, private disability policies are more liberal and will award you benefits as long as you can't do your own job. Read your policy to determine what standard applies to you.

15. I submitted a claim and the insurance company wrote back to say I lied on the application and it is canceling the policy. It sent me a check for the premiums. What should I do?

Do not cash the check until you have received the advice of counsel. While in some circumstances the insurance company may be able to cancel policies for material misrepresentations, in other circumstances you may have good defenses. If you cash the check you may give up your claim to the policy.